Extreme weather events and economic activity: The case of low water levels on the Rhine river

Martin Ademmer, Nils Jannsen and Saskia Mösle
Authors registered in the RePEc Author Service: Saskia Meuchelböck

No 2155, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: In this paper, we exploit exogenous variation in navigability of the Rhine river to analyze the impact of weather-related supply shocks on economic activity in Germany. Our analysis shows that low water levels lead to transportation disruptions that cause a significant and economically meaningful decrease of economic activity. In a month with 30 days of low water, industrial production in Germany declines by about 1 percent, ceteris paribus. Our analysis highlights the importance of extreme weather events for business cycle analysis and contributes to gauging the costs of extreme weather events in advanced economies. Furthermore, we provide a specific example for an idiosyncratic supply shock to a small sector that amplifies to an economically meaningful effect at the macroeconomic level.

Keywords: Climate; extreme weather events; low water; supply shocks; business cycle effects (search for similar items in EconPapers)
JEL-codes: E32 Q54 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-agr, nep-env, nep-gen and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Extreme Weather Events and Economic Activity: The Case of Low Water Levels on the Rhine River (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:2155

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